Double jeopardy and competition law
The prohibition against double jeopardy is a feature of many legal systems in the world. Deriving from the non bis in idem principle (not twice against the same), it prevents someone being prosecuted twice for the same material facts. Two interesting recent decisions by the Court of Justice of the European Union have now clarified the circumstances in which double jeopardy does not apply to multiple proceedings under competition law, specifically where two separate national authorities bring proceedings against an undertaking based on the same set of facts.
The bpost decision
bpost, the Belgian postal group, was fined €2.3 million by the Belgian postal regulator under sectoral rules for conduct which had allegedly discriminatory effects on clients under a rebate system. That decision was then annulled by the Brussels Court of Appeal. Afterwards, the Belgian competition authority fined bpost €37.4m for abuse of a dominant position relating to that same rebate system.
The non bis in idem principle involves two conditions, the bis (the prior final decision) and the idem (the same set of facts). Under EU law and specifically competition law, it is settled that the idem is the existence of a set of concrete circumstances which are inextricably linked together and which have resulted in the final acquittal or conviction of the entity concerned. It is not enough that the facts are merely similar, they must be identical and those facts must have led to the final decision.
The CJEU, after having the case referred to it, held that the protection against double jeopardy does not prevent an undertaking from being penalised for an infringement of competition law where, on the same facts it has already been the subject of a final decision related to sectoral rules.
The reasoning was that the sectoral rules and the competition laws pursue entirely different legitimate objectives. While the postal rules guarantee the ongoing liberalisation of the internal market for postal services, the competition laws prohibit abuse of a dominant position and ensure that competition is not distorted in the market. The CJEU held that it is legitimate to pursue two sets of legal responses in those circumstances; on the one hand to punish infringements of sectoral rules and on the other hand to punish infringements of competition laws.
In other words, it is entirely possible for a public authority to choose to pursue two complementary sets of proceedings on the same facts, when those proceedings are protecting different objectives of general interest.
The Nordzucker and Südzucker decision
Nordzucker and Südzucker are German sugar producers. Among other conduct, they once had a telephone conversation between them in which they discussed the Austrian sugar market. Nordzucker then applied to the German and Austrian competition authorities for cartel leniency and both authorities initiated investigations at the same time.
First, the German competition authorities found that both undertakings had infringed EU and German competition laws; they fined Südzucker €195.5m. The German authority reproduced the content of that telephone conversation in the proceedings, although it relied on other material facts and the authority’s decision became final. Then, the Austrian competition authority sought a declaration that Nordzucker had infringed both EU and Austrian competition laws and sought to fine Südzucker. The material facts relied on in the Austrian proceedings included, in particular, that same telephone conversation cited by the German authority.
The important issue here is that, out of all the matters of fact established by the German authority, the telephone conversation was the only material fact pertaining to the Austrian market.
Upon an appeal, the Higher Regional Court in Vienna dismissed the Austrian proceedings on the basis that the agreement reached during that telephone conversation had already been subject to a penalty by the German authority and therefore another penalty would fall foul of the non bis in idem principle. The Austrian competition authority appealed to the Austrian Supreme Court, which in turn referred the matter to the CJEU. In particular, the Austrian competition authority questioned if the telephone conversation can be taken into account to apply the prohibition against double jeopardy, just by virtue of the call being referred to by the German authority.
There were two main issues for the CJEU:
- As it relates to competition law, as we have seen from bpost, the non bis in idem principle can only be applied where there are identical facts, identical offenders and identical legal interests being protected. However, under other areas of EU law, the court has rejected the criterion relating to identical legal interests.
- Further, it was not clear if it was relevant that the German authority, which as a rule penalises anticompetitive practices only on the German market, took account of a telephone conversation that pertained to the Austrian market.
The CJEU held, in relation to (1), that if two competition authorities pursue proceedings based on the same facts under the same EU competition laws and corresponding national laws, and thereby pursuing the same objective of general interest, and if those proceedings are not complementary in the sense that they relate to different aspects of the same conduct (like bpost), those second proceedings would not be justified. The second proceedings would therefore fall foul of the prohibition against double jeopardy.
As to the requirement for the same facts, in relation to (2), the central question became: can an undertaking prevent further proceedings being brought against it by a Member State (Austria) on the basis of conduct (a telephone conversation) that has already been referred to by another Member State (Germany) in a final decision? More precisely, will this be the case if that conduct (discussing the Austrian market) did not relate to the territory of the Member State (Germany) which has made that final decision?
In short, the Court ruled that if the German authority did not base its finding of the existence of a cartel in Germany on the anticompetitive effect in Austria (the telephone conversation), then the Austrian proceedings do not relate to the same facts as giving rise to the German decision. The proceedings did not therefore fall foul of the prohibition against double jeopardy and can go ahead.
These latest decisions of the CJEU demonstrate the Court’s considered approach to the double jeopardy principle. The prohibition appears to bean appropriate safeguard to prevent unlimited prosecutions by the authorities in relation to identical infringements and the same type of proceedings, but will not provide a broader shield for offending entities. In particular, corporates will not be able to hide behind double jeopardy where the sets of proceedings concerned address different regulatory objectives. In addition, there will be no bar to subsequent proceedings where related facts are taken into account, provided that the decision in the second set of proceedings is not grounded on the same facts as the first set of proceedings.